You Need A Budget (YNAB) – Personal Finance Software

You Need a Budget, YNAB for short, is one of the leading budgeting programs on the market. Many consider it to be easier to use than Quicken and more versatile than Mint, its competitors. It also features an iPhone app that easily sync’s with its software.

You start by getting a free a free 7 day trial key. Here’s a tour of YNAB’s most important functions.

When you start YNAB for the first time, you’ll be offered a choice of using YNAB for business or personal purposes.

The choice you make won’t actually impact the functionality of the program. The program will simply populate the categories and sub-categories with titles that correspond more to one type of user or the other.

Once you make your choice, you’ll then be asked what currency and date format you want the program to be in.

Once you’ve selected your options, you’ll land on YNAB’s starter screen where it gives you a bit of basic advice about budgeting.

Navigating YNAB

Along the left hand side are three choices: Accounts, Budget and Reports.

Click on any tab to navigate to that part of the software. Let’s walk through each function, one by one.

Accounts

To get started, click “Add Account” under “Accounts.” You’ll be prompted with the Create a New Account box.

Fill in all the relevant information to have YNAB start tracking your accounts for you.

The actual accounts page is where you’ll be entering transaction data. Here is where you input both income and expenses.

This is what the main screen looks like:

You can save specific information about what the purchase was, what category the purchase should go into, any notes you have about the purchase and whether it was income or an expense. Along the bottom is your total balance for the month.

Underneath the main Accounts screen is the scheduled transactions setup. This is for transactions that happen every month. Put them in here so you don’t have to enter them repeatedly.

Things like bi-monthly checks, rent payments, cell phone payments, etc that stay constant every month should be entered into the scheduled payments area.

Budget

Click on the Budget button along the navigation tab to get to the Budget screen. Here’s what it looks like:

Along the top is the month navigation bar. Move the slider left and right to change the months you’re looking at.

On the left, you can add and delete categories. When you’re first starting to use YNAB, it’s a good idea to spend some time sorting out your categories as it gets a lot harder to sort out once you have a lot of data.

Each month is divided into three columns of data: Budgeted, Outflows and Category Balance.

Budgeted is how much you want to limit your spending to for that category this month.

Outflows is how much you’ve spent in that category for the month.

Category balance is the difference between what you’ve budgeted and what you’ve spent. If your budget is $500 and you’ve spend $200, then your balance is $300.

YNAB has a special system where if you over spend in one month, that over spending is deducted from your next month. That way, you’re not overspending consistently over a long period of time.

Reports

In the Reports area, you can view a more detailed analysis of all your data.

Again, along the bottom you can use the slider to move left and right to change your date ranges.

In the top table, you can see how much you’ve spent in each category, along with what percentage of your total spending is spent in that category. You can see your spending for any given month, or you can see your averages over time.

Along the bottom, you can see a graph to help you chart the trends over time. For example, if you notice that your groceries bill is going down while your restaurants spending is going up and your total food expenses are over budget for a couple months, that would tell you that you probably need to eat in a little more often.

That’s the overview of how to use YNAB. With consistent use, YNAB can help you get a handle on your finances, figure out how much you’re spending and reduce unnecessary or excessive costs. The software is both extremely powerful and easy to use once you learn your way around.